Societe Brewing’s seven year switch

The last weekend of July, Societe Brewing Company will mark its 7th anniversary with a pair of parties at its Kearny Mesa brewery. While the ales and lagers served will meet the same exacting standards that established Societe as a top San Diego beer brand, its seventh year doing business has been one of profound change. Co-founder Travis Smith amicably split from the company in March. By May, the company that had built a local self-distribution network numbering over 500 bar and restaurant accounts, announced the switch to a third party distributor, Scout Distribution. In doing so, Societe revealed that its most impactful shift lies ahead. By this time next year, the brewery known to local enthusiasts for its refusal to package fresh beers due to quality concerns, plans to release them in cans, including its highly sought flagship, Pupil IPA.

Leading the change is CEO Douglas Constantiner, who co-founded Societe with close friend and partner Smith in 2012. The departure of a co-founder reflected the small brewery coming to a crossroads. Its cultural footprint was larger than its production volume, and with demand exceeding supply, Societe was poised to grow beyond the 4000 barrels it reported producing in 2018. However, to do so with any efficiency would require philosophical changes to the self-distribution model Smith and Constantiner had conceived together.

“It came to a point that we’re getting big enough that [self distribution] started to limit our reach,” explains Constantiner. He notes that further growth would require purchasing more equipment and hiring more employees, including delivery trucks and drivers. It adds to the unpleasant business of collecting payments on hundreds of accounts, which starts to become a full-time job. “It was starting to take away from our focus, which is being a brewery, not a logistics company.”

While distribution companies exact 28 to 32 percent of sales revenue, upon crunching the numbers, the former finance exec concluded that loss about evened out with the increased costs of continued self-distribution. Additionally, Scout may reach restaurant customers outside Societe’s retinue of dedicated craft beer bars, businesses that only deal with distributors. Plus, Scout handles collections.

Constantiner stresses that self-distribution has been vital in Societe establishing relationships with its clients. And in a way it’s financing the brewery’s next phase of growth. “We were able to sell our distribution rights,” he reveals, “and that money will go to a canning line and a lab.”

While it has marketed sour and barrel aged beers in bottles, Societe has refused to issue fresh beers in bottles or cans, citing poor packaging, shipping, and storage that lead to oxidation and other degradations in flavor. Thus the brewery is targeting technology available in a new canning line, and will install a lab to test its efficacy before releasing cans into the wild. Its distribution contract stipulates a 45 day shelf life.

When one visits the brewery today, few changes are apparent. Societe serves beer in crowlers now, and recently introduced tasting flight trays. Meanwhile, the sales staff who traversed the county to build that roster of bar and restaurant customers continue to do so. “They’re more brand ambassadors now than order takers,” says Constantiner. But behind the scenes there is already growth. He anticipates production will increase by half to 6000 barrels this year, and an additional fermenter will boost production again next year when the canning starts.

Perhaps most interesting in these developments is that, while several San Diego breweries have sought expansion with satellite tasting rooms or additional brewhouses, including several built out of state, Societe has no plans to go anywhere. Constantiner wants bar and restaurant clients to sell Societe’s beer, and its existing space can handle up to 25-thousand barrels of annual production with minimal upgrades.

Societe’s current trajectory for growth doesn’t even require taking beer outside the county. “We want to be the New Glarus of San Diego,” Constantiner says, referring to the brand that has become the 25th largest beer company in the nation without ever distributing outside the state of Wisconsin. “I think it’d be cool if you see Societe everywhere in San Diego, and the moment you step outside, it’s nowhere to be found.”